Arent Fox LLP won a major victory for its client in Secretary of Labor v. Delek Refining, Ltd., OSHRC Docket No. 09-0844, in which the Occupational Safety and Health Review Commission extended the attorney-client privilege to certain reports prepared by third-party experts. In a case of first impression, the Commission established a three-part test for determining whether a third-party expert’s report is protected by the attorney-client privilege, providing clear guidance to employers and counsel who engage experts to assist in evaluating complex health and safety issues.

At issue in the case was a draft report created by a third-party expert to assist an employer’s counsel in providing compliance advice to the employer. Specifically, the employer had hired a law firm to assist it in evaluating legal issues associated with compliance with the Process Safety Management standard. Because the standard is technically complex, a coordinated legal and engineering analysis was required. Accordingly, the law firm retained a professional engineering firm with extensive knowledge of process safety to assist it in evaluating a legal issue — whether the employer’s process safety management program complied with OSHA’s Process Safety Management standard. The engineering firm was asked to gather the relevant technical information from the employer, report it to the law firm on the employer’s behalf, and provide the law firm with its conclusions. The engineering firm reported its findings to the law firm in the form of a draft report.

Later, when conducting an inspection at the employer’s facility, OSHA issued a subpoena to the third party engineering firm, seeking a copy of the draft report. The employer filed a motion to quash the subpoena with the Administrative Law Judge (ALJ) presiding over the case, asserting that the draft report was protected from disclosure under the attorney-client privilege, as it was created in order to aid counsel in providing legal advice. The ALJ denied the employer’s motion and its subsequent motion for reconsideration, reasoning that the privilege only extends to the report of a third party when the report collects and translates client information into useable form in a ministerial fashion, such as when a third party translates the client’s statement from one language to another.

The employer then filed a petition for interlocutory review before the Commission. The Commission granted the petition and stayed the ALJ’s orders sua sponte during the pendency of interlocutory review.

In its order on interlocutory review, the Commission held that although the privilege certainly may apply to ministerial reports, it is not limited to such reports, and complexity is not a relevant factor in determining whether a document prepared by a third party is protected by the privilege.

The Commission then set forth a clear three-part test for determining when the attorney-client privilege protects a document created by a third-party expert. The first requirement for application of the privilege is that the client provided information to the third party, rather than the third party gathering its own information. Thus, the privilege will not apply where the third party has been retained to obtain information the party does not have or to gather data through its own studies and observations of the physical conditions at the client’s site rather than through client confidences. The second requirement is that the client must have sought legal advice as opposed to some other kind of advice or information. The third requirement is that in order to provide the legal advice, the attorney needed the services of the third party to translate technical or complex information. Where a third-party expert’s report satisfies all three of these requirements, the report is, according to the Commission, protected by the attorney-client privilege.

Employers can use this guidance from the Commission to structure their relationships with experts, permitting them to gain critical insights from experts, improve safety and health in the work place, and assure compliance with OSHA standards and regulations while preserving the privilege.

For more information, please contact Mark Dreux, Head of the Arent Fox OSHA Group, at 202-857-6405.

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